Foresite Capital, a firm that invests in early-stage healthcare and life sciences companies, today launched a $173 million fund designed to further finance startups launched by its Foresite Labs entrepreneurial innovation hub.
The new fund will be one source of capital for Foresite Labs startups, which will continue to be funded through the $969 million raised last year by Foresite Capital—consisting of the $775-million Fund V and a $193.75 million fund for selectively making additional investments in their highest conviction Fund V portfolio companies, called the Opportunity Fund.
“What motivated this fundraise was, first, that we were able to launch more good companies, and they have grown up and reach milestones a little bit faster than we anticipated; and second, that limited partners who were watching what we were doing during the period of the Fund V fundraising process, a lot of them expressed a desire to have more exposure to the companies that were coming from Foresight Labs,” Vikram (Vik) Bajaj, PhD, CEO of Foresite Labs and a managing partner with Foresite Capital, told GEN Edge.
Bajaj and other partners of Foresite Capital raised the $173 million in the latest fund—which was oversubscribed from its initial $150 million target.
“Healthcare in the next 10 years is going to be deeply transformed and made both more efficient in terms of its product development, more responsive also to the needs of our patients and the healthcare system,” Bajaj said when asked why investors oversubscribed in the new fund.
That transformation, Bajaj said, is largely being catalyzed by tools from the world of data science—namely larger datasets and the ability to produce specific datasets that shed light on areas ranging from drug discovery to the individual risk trajectory of patients.
“Those things will be no less transformative in healthcare than similar concepts have been in other industries that have been altered by the same toolkit or versions of the same toolkit,” Bajaj asserted. “The differences here, of course, are there are much higher barriers to entry for people who want to rigorously explore those ideas where biology, is in the middle of it.”
Reducing barriers to entry
“What we have done is create Foresite Labs to really reduce those barriers to entry,” he added.
Bajaj defined barriers to entry as including the acquisition of data relevant to a drug discovery or clinical problem; analysis of such specialized data.
“The number of people who are experienced in doing this well, they are few and far between. We have many of them on our platform and so they’re able to not just create platforms, but use those platforms to accelerate product development in unique ways,” Bajaj explained.
Foresite Labs does not have set ranges of funding for its startups, and has not committed to a number of range of additional company launches this year.
“What you should expect, though I can’t guarantee this, is that we’d actually launch fewer companies. They will still be transformational with big ideas, but there may be fewer of them every year in the future. But we haven’t set any formal targets for that,” Bajaj said.
Within Foresite Labs’ pipeline of companies, he said, are “maybe a dozen” where people are assessing if a startup should be advanced to a stage of investing time and money on it.
“There’s probably two or three [startups] at any time where people are really trying to build the business case and do some scientific analysis as well, and then of course we also continue to partner with the companies that we’ve already created,” Bajaj said.
“We’re more focused on taking a growing pipeline of ideas and finding which ones are actually actionable, which is a combination of many things: The impact of the idea, the business case, but also the timeliness. Some ideas are before their time, so we hold on to them for a few years.”
Foresite Labs focuses on launching companies that apply data science tools to solve unmet medical needs. To date, Foresite Labs has publicly launched four companies:
- Alumis (formerly Esker Therapeutics), a developer of precision therapies for autoimmune diseases that raised $200 million financing in January, led by AyurMaya, an affiliate of Matrix Capital Management, and an undisclosed U.S.-based healthcare-focused fund.
- Interline Therapeutics, a protein therapeutics developer specializing in systematically mapping and modulating protein communities. Interline completed a $92 million Series A financing in May 2021.
- Sestina Bio, a synthetic biology company that develops food, therapeutics and apparel by applying ultra-high throughput single-cell technologies.
- TenSixteenBio, a precision medicine developer focused on treating age-related diseases by targeting clonal hematopoiesis of indeterminate potential (CHIP) mutations. The company was launched January 27 with $40 million from Foresite Labs and GV (formerly Google Ventures).
“This fund represents strong affirmation of the potential of the companies being built within Foresite Labs,” stated Jim Tananbaum, founder and CEO of Foresite Capital.